Each week at ChartSmarter we like to bring to a little insight into what we do on a daily basis. We have been at it for 5 years and we love doing it. Each night we detail 7 to 8 of our favorite ideas, both long and short, for the next days session. We do NOT have a chat room, nor are we active “tweeters”. We like our business growing by word of mouth. For those who would like to see a full copy of our Monday Game Plan, email me at chartsmarterblog@gmail.com.
Retail sales came in soft last week with a loss, where a .3% gain was expected and the group has been floundering somewhat with the likes of WMT, GPS, KSS and ASNA at or within bear market mode off nearly 20% from recent 52 week highs. Sure there are some standouts like a NKE, RH or ULTA. ZUMZ however is now 37% off its most recent 52 week high and lets take a closer look.
In our Tuesday 4/21 Game Plan we looked at lagging retail play ZUMZ. It had been tentatively on our long watch list for a potential breakout above a 41.81 cup base pivot point but it never really challenged it. The base began at the end of an impressive 12 of 14 week winning streak between the weeks ending 10/10/14-1/9/15. The 2 weeks of 4/10-17 lost more than 17% on big volume and we highlighted a short entry at the 200 day SMA at 34.20. It is now lower by more than 20%.
Stocks to be viewed as shorting opportunities are ZUMZ. ZUMZ is a retail play that has been struggling recently as the group strengthens showing divergence. The stock is down 11% YTD but higher by 42% over the last one year period. It has recorded 3 consecutive earnings misses of 6.8, 2.8 and 8.3% on 3/13, 12/5 and 9/5 after a nice showing on 5/23/14 up 5.8%. The last 2 weeks have been just brutal with combined losses of 17% on heavy volume. The round number theory has come into play with the 40 handle being tough to get through on a weekly basis dating back to June ’12. ZUMZ sliced its 200 day SMA last Friday for the first time in almost a year losing 5.7%. Look to short the name back into that line at 34.20.